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Blog / UPS and FedEx surcharges coming to an urban center near you
2 minutes read

UPS and FedEx surcharges coming to an urban center near you

Attention shippers! If you send parcels to addresses in Boston, Chicago, New York, Los Angeles, or San Francisco, you may be surprised by additional fees on your next bill.

UPS and FedEx announced new delivery area surcharges (DAS) for 82 urban ZIP codes, beginning on April 8 and 15, respectively. Considering the size of the US, 82 ZIP codes may seem insignificant, but these densely populated ZIP codes represent nearly 3 million people. Today, we’ll discuss the dollar amount for the surcharges, what they cover, and how you can reduce their impact on your business.

How much do these surcharges cost?

Do you ship to addresses in select ZIP codes within Boston, Massachusetts; Bronx and Brooklyn, New York; Chicago, Illinois; and Los Angeles and San Francisco, California? Prepare to see delivery area surcharges ranging, on average, from $3.95 to $5.85 per package on your next bill. FedEx and UPS set the DAS by considering the shipping method (air vs. ground) and whether the package is destined for a commercial or residential address. In most cases, the carriers calculate DAS by delivery address but may extend to pick-ups in the case of returns.

Of course, the above rates can rise to $7.70 per package with delivery to addresses categorized as “remote” or “extended.”

What do these tolls actually cover?

The carriers say these new DAS for densely populated urban areas will help cover tolls and costs associated with using bridges and tunnels. Experts say that’s only partially true.

In this freight downturn, delivery area surcharges are another way for carriers to boost their bottom lines. UPS and FedEx are sure to expand their revenue with this move. But what does this mean for your shipping expenditures?

How can you reduce the impact of the new DAS?

As a shipper, you prepare for annual rate increases and surcharge adjustments. After both carriers’ general rate increases of 5.9% in January, you probably didn’t anticipate an off-cycle increase.

Thankfully, you’ve got options if you’re shipping to addresses within the 82 ZIP codes affected by increased surcharges.

If you’re shipping multiple parcels to the same address, consider consolidating into fewer packages to reduce DAS.

Not an option?

ShipRx can help you reduce your costs through contract renegotiation and parcel audits. High-density, high-volume shippers are great candidates for contract renegotiations that include terms for reduced delivery area surcharges. We’ll review your current contract and advise on ways to cut costs and achieve lower surcharges.

ShipRx’s parcel audit service is another excellent way to save money without investing extra time into the shipping process. Signing up is free and takes less than 5 minutes. We’ll automatically check every shipment for service failures and incorrect charges, and you’ll see refunds as early as your next billing cycle.

Sign up for our free savings analysis today and increase your own profit margin instead of boosting the carrier’s bottom line.

 

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